John Pletz On Technology

Chicago Ventures, GoHealth and kCura founder Sieja back this startup

HealthJoy, a startup that's betting chatbots will help smaller companies get a better grip on health care costs, has raised $3 million from Chicago Ventures and other investors, including kCura founder Andrew Sieja.

The company is using artificial intelligence to help employees figure out their health care options and the costs associated with treatments, depending on their insurance.

HealthJoy was founded in 2013 by Justin Holland, a San Francisco-based engineer and entrepreneur who had launched two ad-tech companies. He decided to tackle health care, using software to help individuals who bought insurance on Obamacare exchanges figure out which providers were included in their coverage. He moved to Chicago, where he partnered with GoHealth, a health-insurance exchange operator that's now among HealthJoy's initial backers.

HealthJoy originally was a consumer product, but it shifted last year to focus on mid-sized companies with 100 to 2,000 employees that self-fund their health insurance programs. The idea is to enable these companies to save money on insurance by educating employees about their options for care and how the coverage works. One of the main features is automating the enrollment and on-boarding process to gather information about employees and their health conditions.

"It's an extension of the (company's) HR team," Holland said. "Our technology helps navigate employees to the right decision. The original thesis was that all the focus had been on enrollment technology and no one is doing anything post-enrollment. Engagement is the No. 1 problem."

HealthJoy also plans to gather data on claims to help provide predictive analytics to companies to better forecast health care spending.

The company sells its technology through insurance brokers and benefits consultants, Holland said. HealthJoy has 32 employees and plans to hire additional staff in product development and sales.

In addition to Chicago Ventures, other investors include Social Capital; Sidekick Ventures; Brad Hoover, CEO of Grammarly; Ben Evans, CEO of OurHealth; Eduardo Vivas, founder of Bright.com, and Jason Theofilis, CEO of MundoMedia.